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Loan Origination System

Development

3.5x faster

time to market

2.3x

cost reduction

100% flexible

Loan origination automation

Business Value

5x lower

decision-making process duration

+73%

ETL efficacy

100%

without IT department dependency

Issue

Loan origination decision-making strategy was implemented as two pieces of pure code in Oracle. One piece with knock-out rules, affordability calculation, and the offer matrix was part of the loan origination system. The other piece with manual checks verification belonged to the underwriting module. The risk management team supported strategy in two systems, relied on IT department resources, and depended on the IT release schedule. Strategy maintenance required strong programming skills.

Negative consequences:

The risk department was drowning in loan requests, failing to process them all in a timely manner. The slow loan application processing was aggravated by the legacy risk management measures (mediocre risk level calculation, suspicious action identification) that lacked automation. Above all that, the bank needed extra data storage.

Slow credit decision-making;

Excessive manual tasks and tons of requests increased the time-to-decision and calculation costs.

Lack of detailed client overview and banking accounts’ protection;

The legacy risk management solution offered weak client profiling and access control.

Ineffective data management;

The Bank’s BI system required an additional database to store large amounts of client-related data and calculations.

High IT department dependency;

The Bank’s decision-making strategy maintenance required strong programming skills. It resulted in higher IT costs and inhibited implementation.

Goal

The Bank’s Risk Management and Sales department representatives aimed to automate the loan origination decision-making process and grant credits safely. In addition to that, the bank needed to integrate a new database and facilitate ETL processes.

Achieve Automate loan origination decision-making processes, introduce digital risk management measures (KYC), and integrate the applications with a database.

Eliminate Manual tasks related to loan origination decision-making and risk management staff dependency on the IT department.

Reduce Credit time-to-decision, core system ETL process downtime, labor costs, and fraud risks.

Solution

Our team developed and implemented the credit decision platform using the ProcessMIX BRMS. At the same time, we created a database to store the results of derived calculations and decision-making strategy execution.

Easy-to-use visual decision-making platform;
Comprehensive risk reporting that increase risk management and detail client portfolios;
Complete Risk Department independence from IT specialists;
Fast, semi-automated risk calibration process done in days (instead of weeks);
DB integration with Bank’s Oracle BI system;

Currently, we continue to collaborate with the Bank’s Risk department working on additional Business Rule management improvements.

ProcessMIX in action

Here’s how the solution works:

The Bank’s Oracle system transfers loan applications to ProcessMIX. This includes requested parameters, applicants’ internal and external data, and details.
The platform initiates the first stage of analysis. ProcessMIX applies the Bank’s rules and policies and makes an application decision based on client-related data from the internal resources (banking system and database). Depending on the results of the initial analysis, the platform either declines the loan application or sends it back a request for additional info. For example, affiliated parties’ details, client’s credit history, etc.
The second stage of analysis runs when internal resources are not sufficient for the final decision. ProcessMIX requests data from external sources (i.e. credit bureaus). If the client’s credit history or other external information regarding the client’s behavior fails to comply with the bank’s policies, the loan application is declined.
The final stage is the credit approval or refusal of the loan, and reporting to the Bank’s Oracle BI system about the decision details.

Summary

3x faster

time-to-decision see in the top

2.5x lower

development costs

100% customizable

decision-making strategy and business rules

We achieved the goals of our client owing to the features and functionalities of the platform. They facilitated the bank’s loan origination pipeline and reduced manual labor:

Visual drag-and-drop interface that allows regular risk department representatives to create applications and automation tools.
The Bank’s business users do not need to wait for the IT department to implement new decision strategy requirements.
ProcessMIX analysis tools allowed the bank to automate its loan origination process and spot potentially risky clients.
Pre-configured connectors to the Oracle BI system facilitated DB integration. What’s more, the platform allowed developers to create custom rules for ETL processes.
95% affordability calculation accuracy achieved due to ProcessMIX’s smart analysis and calculation tools.
IDE (Integrated Development Environment). It improved our development team’s collaboration with the bank’s Risk Management Department.
Flexible out-of-the-box architecture that gives space for further system scaling and integrations. Bank staff can add new functionalities or business rules whenever they want, according to their ProcessMIX pricing plan.
Credit decision-making platform creation, strategy implementation, and DB integration took only several weeks.